There we are. And then Julie will edit that so that we can share that link with everybody.
All right, well let's get this show on the road. It's 7.32. Hi everybody, I'm Charles Corvus,
Australasian passion provocateur. For those of you who might not know me, I'm wearing my
red jacket for passion. Tonight's a special foam meeting, FOAM, standing for fighters opposing
autocratic maniacs. We are Warriors for Freedom, generally on this group, but there's a special
occasion that we're recording because we have Jerry Brady, formerly Dr. Jerry Brady, although
he's still a doctor, who came from many years back and he's going to tell us about that. And now,
somewhat of an expert in the areas of money and finance, and he publishes a newsletter that he's
going to tell us about. And one of the benefits of this whole scamdemic, known as COVID, is that I
have met some wonderful people, including a number of people on this call, including Jerry Brady,
from Fighting for Freedom against the COVID scam. And I say to all of you, look at all the wonderful
people you've met. And at the party that we referred to earlier that Julie and I were at
just recently, we were having the conversation that the people who are on our side,
we seem to be creating deeper relationships with people who are driven by principle rather than by
comfort. So I think it's worth observing which friends you've lost, but which friends you have
gained and the depth of that friendship. So welcome to this presentation, those who are live and those
who are watching a recording. Jerry, a number of people have asked us a question, that's why we put
this on and thank you for doing this. They say, should I sell my $2 million house? And if I do,
and I say, then what are you going to do with $2 million cash or $2 million in money? And Jerry's
educating us on the difference between cash and money. And it's a great question. And so Jerry has
agreed to come along. So Jerry, tell us about you and your journey. And let's talk about,
let's talk about money and what to do in this strange world we live in.
Well, thanks for that, Charles. I hope you can hear me nice and clear. I'd like to share the
screen. So can you allow me to do that? Yes, I can do that now. Okay. Well, I'll just do that.
And I'll just put this to a slideshow. Let me see. There we go. You should be seeing a slideshow,
I hope. Is that correct? You seen that on your screen? Okay. Yep. Money, money supply and wealth
is the title of the talk tonight. So we've got a lot of ground to cover. I'd suggest you get a
pencil and paper and take some notes as we go. I'm going to move through a lot of information
fairly quickly in the next 30 to 35 minutes. So I'm Dr. Jerry Brady, I'm a GP, or was a GP,
I had 30 years of clinical experience in the frontline of medicine, mainly in adult medicine.
I got bored with it and did a lot of other things. I started a biotechnology company in 1990,
which specialised in genetic engineering and the large scale fermentation of genetically engineered
bacteria. So I was at the very forefront of the world of genetic engineering and biotechnology at
the time, that company became quite a large company. And then I started another company,
which was a company dedicated to mapping the internet. And we became the first company to
map the internet successfully. We beat everybody, including IBM, Microsoft, you name it. And then
I was able to retire from medicine in 2007. I was aged 53 because my company was, my biotech
company was purchased by its biggest shareholder. And then I went to live in Europe. And then
eventually I started a finance and economics newspaper called Boom Finance and Economics.
And that newspaper is aimed at and read by the chief central bankers of the world, the deputy
governor, the deputy governors, the chief advisors, the chief economic advisors, the deputy advisors,
and professors of economics, professors of finance, fund managers, very famous, some of
them very famous fund managers. So I have an amazing readers list. If you looked at the list,
it's quite stunning even to me. I write an editorial every week based on the week's events.
It's an ongoing letter to my readers. It comes out every Sunday morning. It's my basic, my sermon to
them. And I'm trying to steer the world of finance to a realization of what the problem is that we've
got and how to fix it. I'm also the founder of the COVID Daily newspaper you'll see on the screen
there, where I have a team of people sending me articles all over the world. And I publish those
articles every day on a daily basis. So that's I recommend you all go to that link every day.
So next slide. This is the disclaimer slide. This is all education. It's not investment advice.
So I'm not giving any investment advice. I don't do that for a living. I'm retired, fully retired.
There's a disclaimer there. I won't read it all out. But it's basically a fairly broad disclaimer,
disclosure, and a fair use notice. You can all get access to this slideshow later. So
you can read all of this later. Basically, it's an education talk. So let's start with money.
Money is a token. You can interview PhDs in economics, Nobel Prize winners in economics,
and they'll have a very, very sketchy idea about what money is and what banking is.
So it's a little specialized area all of its own. And it's not dealt with very well at all by the
world of economics. You can go to a website produced by the Royal Reserve Bank of Australia.
It's just called it all the what is money website is quite a good website and explains what money is
in fairly simple language. So it I just cut some words from that it says it's a reliable way to
pay or be paid as a way to quote prices and as a way to store value over time. In other words,
it's widely accepted means of payment, widely accepted means of payment. It can be a unit of
count, and it can be a store of value. So these are the three attributes that make up a fairly
well used around the world. But there's more to money than those three things. So what do we need
money? Well, money has value because people trust that it has value and that it will continue to
have value. It's all about trust. That's what money is all about. So therefore, it's all about
actually all about contractual agreements between individuals and also between companies between
individuals and companies and between governments and between individuals and corporations with
government. So it's all about trust. It says there that history shows us this trust is sometimes
broken. That is true. So why do people keep on using it? Well, firstly, we talk about
trust being broken. And I'll give you an example of that Germany, for instance, which is a very
powerful economy in Europe, has had six official currencies in the last 100 years. They've had a
lot of breakage of trust in regard to their currencies, and they've had to renew that trust
and create new currencies. And that's pretty normal. I don't think that's abnormal. But why
do people keep using money? Well, the answer is that it's incredibly useful for facilitating trade,
which in turn leads to higher living standards. So what it actually generates is a thing called
economic complexity. This is a really important thing to understand. The headline of change now
is not just a token, it's a token of trust. Now we've got to talk about legal tender. What is
legal tender? This is a very important term to understand. Legal tender is a form of payment
recognised by the legal system, such that when it's offered or tendered in payment of a debt,
the debt is legally discharged. The credit or the creditor cannot refuse a legal tender
under the law. Okay, that's very important point. Bank notes are legal tender in Australia under
the Reserve Bank Act of 1959 and coins are legal tender under the Currency Act of 1965.
The system of money with a currency of a country is not backed by a physical commodity,
e.g. gold, but by a directive from a government that makes it legal is called a fiat system.
We have fiat systems in place in all nations of the world now. And why is that? It's because it
works well. We've tried just about everything else. So let's have another look at this term
legal tender. We can look at a one dollar note. Of course, there is no one dollar note.
Just get this off the internet as an example note of an Australian dollar. You'll see this is an
older Australian dollar mock-up because it says at the top, the Commonwealth of Australia.
And down the bottom, you've got two signatures. You've got the signature of the governor of the
Reserve Bank of Australia and you've got the signature of the secretary to the treasury.
So in our country, the money is being issued, the cash is being issued jointly by the treasury and
by the central bank. That's not the case all over the world. There's different circumstances
in different countries. If you read the thing below that, it says legal tender throughout the
Commonwealth of Australia and the territories of the Commonwealth.
Now, this is another more, a later version that I pulled off the net. And you'll see down the
bottom, it says governor Reserve Bank of Australia again with Bernie Fraser's name. It says secretary
to the treasury again. So it's a jointly issued note. And this time it says this Australian note
is legal tender throughout Australia and its territories. And you'll see at the top of the
note, the word Australia, not Commonwealth anymore, becomes Australia. I've got a
$20 note in front of me. Oh, I can't read it now. I'm going to go on to that. I can't read it
anymore. But they've changed the words slightly again. Now it's only Australia. It doesn't
include its territories. So they've dropped the word territories from the latest version.
Okay, we all sort of know most of that. So most of us have heard those sort of things. So
let's get on to the interesting part of what's the history of money.
Well, money goes through a history, goes through a pretty clear series of changes.
Initially, there's barter when there's no money. In barter, there's just an exchange of goods or
services between people, for instance, in a tribe or a village. And I always say this lasts for about
one second or maybe two seconds doesn't last long, it might last a minute. Okay. So barter really
doesn't last. And the reason is because credit arrives in a heartbeat. Why does credit arise so
quickly? Well, it's easy to do. It's an exchange promises. This is a really critical thing to
understand that credit money is an exchange promises. So the lawyers would recognize straight
away, there's a contractual element there. And then tokens get invented to represent these promises.
And tokens are really promissory notes. So they're just written or representative
tokens that can represent the exchange of promises in the village or the tribe or whatever.
It then evolves pretty quickly to tribal acceptance and law, where the tribal chiefs get together and
say, well, we'll accept this token here, this bag of salt or this seashell or this silver coin
or whatever. We'll pass, in effect, a resolution and accept this and make it legal. So in other
words, they render it legality. And then you get the most important element in money, you get general
acceptance. So these concepts are really easy to understand and how they evolve. So general
acceptance is the key element of money. And then on the screen, we've got along with
fungibility. We finally got a difficult word to understand fungibility.
Fungibility is something money should always have. And this refers to equality, it allows one thing
to be exchanged, substituted or returned for another thing, but always under the assumption
of equivalent value. So units of money should be interchangeable with each other. So this is
fungibility. It's very important. It's got to be portable and durable, recognizable, and generally
accepted. So these are principles that occur at a tribal level. The tribes can decide this.
One tribe could have seashells and the other tribe over the other side of the mountain
could have bags of salt. It's not until they trade with each other that then other arrangements have
to be made. So these tribal agreements, initially they start between individuals, they have an
exchange of promises. Those promises are usually contract limited in time. So the period of the
contract is pretty clear. Like one tribal person will say, you come and help me repair my roof
this week. I'll come next week and help you reap your wheat crop. And that contract is agreed to
and they've got a two week time frame. It could be much longer, but they've got a time frame. It's
limited in time and they agree. And one person comes and helps with the roof and the other person
goes and helps with the crop. And then the contract is completed and fulfilled.
When you get to the tribal elder agreement, the chiefs, then you get the force of law and
it becomes a perpetual contract. So it's a slightly different contract then. It's a perpetual contract.
Money usually has no real limit, but I'll clarify that more fairly soon in regard to the two
different types of money. And then with this term currency comes along. So currency is used to settle
transactions and it's the flow of money. Currency is the term used when money is flowing.
Remember, the Latin for currency comes from something that's flowing like water flowing.
The next concept to understand is the money supply. Now, a lot of people don't understand
that you've got to have a money supply in an economy. Money is really like water on a garden.
Money is really like water on a garden. I explained this to people. If you don't put the water
on the garden, the garden will die. And the money has limited quantity. It's like a dam or a tank.
So you've got to be replenishing your money supply while you're spreading your water on your garden.
This is an easy thing to understand. What is the money supply? Well, the money supply in the dam or
in the tank is all the currency and other liquid instruments that's circulating in the economy on
the date measured. And that roughly includes cash and deposits. Deposits must be easily accessed.
So that's a simple example of money supply, cash and bank deposits. Now, cash is issued by
governments, mostly, not by central banks, governments in most cases. And they also issue
coins. But there can be a combination of central bank issuance and treasury issuance.
The bank regulators can influence the supply of money, how much money goes from the tank to the
economy. And that's very important. They usually do it by setting interest rates. But they also set
credit limits. And they have other instruments. We won't get into the nitty gritty of how
central banks operate tonight. So if you want to learn more about money supply, there's a link
there I put in the presentation. And it just runs through the different types of money supply.
And these are the terminologies that are often used. M1 plus MO is where you include currency
notes, coins, bank reserves and demand deposits. M2 is M1 plus marketable securities and other
less liquid bank deposits. And M3 is M2 plus money market funds. And M4 is M3 plus the least liquid
assets. That's a rough definition of money supply. Different countries have different definitions,
but it gives you some idea that you can actually look at the money supply in different ways.
I can't see the top of my screen. I hope you can see it there. It says bank loans
create fresh new money out of thin air. Yep, we can see it, Jerry. Good. Okay. Fresh new money
out of thin air. Banks do this when they make a loan, but they can't do it by themselves.
They've got to have a borrower. And this is really, really important concept to understand.
By the way, you'll see the red streaks on my slide presentation. I wasn't aware they were there when
I chose that theme. So I just excuse those red lines on the slideshow. But banks, and when I
say banks, I mean commercial banks, or what we call retail banks. In other words, banks like
your big, big four banks and all your smaller banks that people know about in Australia.
They can create fresh new money out of thin air when they make a loan, but they've got to have
a borrower. Why do they have to have a borrower? Well, because they've got to create a contract.
It's pretty obvious when you know what I've just told you, they've got to have a contract
between the borrower and the bank. There's a few other interesting things about banks. There's no
such thing really as a deposit. In law, a deposit really doesn't exist. It's a loan. You've loaned
your money to the bank and the bank has been the other side of that loan contract. Now, this gets
complicated here. Banks don't make loans. They purchase securities. This involves the law of
mortgage agreements. And when they do most of the loaning is to loan for homes. So
they actually create securities and then purchase them. We won't go into that tonight either. It's
complicated. The last sentence is very important. Bank money or credit money, money created as
credit is destroyed when a loan is paid off. So it's dynamic. Money is dynamic. The money that
was created 45 years ago no longer exists. Really, it can be, there's a slight variation of that theme
too. I'll mention later, but bank money generally is destroyed when a loan is paid off. So there's a
need to continually create more credit money as bank loans as time passes.
The history of banking. So let's start looking at the history of banking because now we've gone
through money. We've got to come to terms with banking. Why do we have to come to terms with
banking? Well, the reason is this, and I'll refer to this again later. The reason is that
in our current advanced economies of the world, not only do we have to come to terms with
banking, but we have to come to terms with the history of banking. And that's why we have to
come to terms with banking. In the advanced economies of the world, 98% of our money supply
is credit money created in a bank loan. So you've got to start to understand the
role of a bank in our economy and what happened in history in regard to banking.
So we can go right back to Babylon, 1800 years before Christ B.C. Hammurabi, the king of Babylon,
had four laws surrounding money and credit. You can look up the name Hammurabi. There's a thing
called Hammurabi's Code. Some of you may have heard of that, but that's where it began. It
came from Babylon and spread around the Middle East and then across into North Africa and then
into Italy. And in Italy, it really started to become what we know as today as a modern banking
system. There's a bit of an argument about did it start in Venice or Genoa, but most people agree
that it started in Venice. If you go to Venice, it's an island. It's now connected to the mainland
with a bridge, not quite a bridge, but a land bridge with a train track on it and a road. But
it was previously an island in a lagoon surrounded by water. It couldn't be easily attacked.
And the Venetians inherited the idea of banking from Babylon, and they inherited it through the
Jews who arrived from Babylon. And they set up business. Now, in Venice, they were not allowed
to be merchants. They were not allowed to be professionals. They were not allowed to
be government officials. So they were very limited in what they could do. But they had the secrets
of banking and the secrets are called the secret ledger. So they understood the secret ledger
and double entry bank. They were allowed to live in Canareggio, which is a quarter, a small area at
the back of Venice. It's basically the back, the boondocks down the back of Venice. They were allowed
to live in Canareggio. They were locked in every night, usually six to seven pm, I forget the time.
The sheriff would lock them in. They had to be in there. They were not allowed to practice their
faith. They had secret synagogues. They're still there today. You can go and see their secret
synagogues. But they were locked up all night. And then the sheriff would open the gates in the morning
and they'd come out. The men would walk with their benches on their shoulders, their bench,
and they'd carry the bench up to the Rialto Bridge. Some would set up around the Rialto Bridge,
and the others would keep walking and they would walk up to the St. Mark's Square,
which is the main square in Venice near the Doge's Palace and the Cathedral. They would set up their
benches around the square with their backs to the wall. And the bankers would sit at the table.
And in Italian, the table or the bench is called il banco. That's where the word bank came from,
il banco. And behind the bankers would stand the escritti. The escritti were the men who wrote the
ledgers. They kept it very difficult for people to see what they were writing because they had their
backs to the wall. It wasn't encouraged that anybody could see the ledgers. I'm a descendant
of the escritti in some way. My mother's maiden name is Scrivener. And Scrivener,
the Scriveners were the escritti in England. So I am actually a descendant of an escritti.
They had a relationship with the Doge who was the King of Venice. It renewed every two years
because the Doge changed every two years. And they were able to just keep their arrangement
going because the Doge would come and go every two years. And the new Doge would have to learn
what was going on. Well, he never really learned what was going on. So Venice was a very strange
situation where the Doge was changed every two years. And so banking was allowed to grow and
flourish. And Venice became a very powerful trading nation with a great navy. They had
great shipyards there, which are still there today. And that's where banking began. There were
private banks formed from families pretty quickly. There were banking runs. They had
runs on bank. And I mean run. They were running through the streets of Venice to get their money
before the other depositors got there. That's where that term comes from. And Genoa also had
a bank over in Genoa, the bank called Di San Giorgio. And that bank was established in 1406.
It was only closed a few years ago. So it's the longest living bank that we're aware of. I think
there may be one other bank in Banco di Siena. I think it's really cool. It might be a little bit
older. So where did the banking go after that? Well, it spread across the water to Padua, which
is just across Padua in Italy, across the water from Venice. Then it went to Ferrara, which is
the town south of Padua, going west to Mantua, then to Milano, then south across the mountains
to Florence or Firenze, across to Genoa, Siena and up to Odessa because they could travel on the sea
to Odessa. Odessa is still very famous today because of course it's a key port in Ukraine.
And a lot of the bankers went to Odessa and then spread up through Hamburg to the north of Germany.
And others went over the Alps to Bavaria, Munich, Frankfurt, Amsterdam, across to Amsterdam and then
London. That's how it all spread. The important thing that really happened happened in Florence.
That's where the Medici family joined the state, which was then the church, with the banking
function. So they fused banking with the state. Some of the Medici's were popes, others were bankers.
They were very successful at what they did.
What other central banks were formed? Well, you've got all the dates there. Sweden had
the Riksbank in 1668, the Bank of England 1694, Scotland, Spain 1782, France 1800,
and Netherlands 1814, Norway and Finland. So you notice Germany is not there because Germany wasn't
a single nation. It was a fiefdom of many, many powerful families and
and really many nation states that are really family states.
So we go back, we've got to wonder why did all these central banks form?
Well, there's a whole lot of reasons the central banks form because the king or the sovereign or
the royal family needed someone to help them with their banking and to be an intermediary between
them and the people. So that was the first thing with central banks. And then as private banks
formed, more retail or commercial banks formed, then the central banks were invented to
maintain trust in the banking sector, the whole sector. So it forms a very important role
in maintaining trust. Remember, trust is the key important thing in money and in banking.
Now you can look at life without a central bank. It's not hard to look at it. It's very
fashionable these days to attack central banks and say they're terrible, terrible things and
that central bankers are terrible people. But the fact is, before you reach that conclusion,
you should look at life without a central bank. And it's very easy to do. We can look at the 19th
century in the United States and see what happened because they had a very long period without a
central bank. In fact, it was about 60 years, I think, from memory. I've written an article on
that and I'll put the link up there for you. If you get these slides, you can click that link.
And in that weekly editorial, I wrote about the failure of free banking and sound money in the
United States and the financial mayhem in the 19th century, including the panic of 1837,
which is a very interesting article. And I wrote it, but a lot of people like to read it.
It opens their eyes about what life is like if you don't have a central bank.
You get total financial chaos, basically. Now, what is our financial world that we're living in
now? That's really important to understand because we live in an empire. And the empire
is the U.S. dollar empire. That's what we're living in. It's very similar to the Roman Empire,
but this empire is a currency empire. All of the U.S. military is not there to fight off enemies.
They don't have anyone seeking to invade the U.S. It's all there to defend the dominance of the U.S.
dollar. That's what it's all there for. Now, this all began in a meeting in July 1944 in New Hampshire
where the Americans called all of the allies together in a little town called Bretton Woods
in a hotel called the Bretton Woods Hotel. And that meeting was very, very important.
In that meeting, they established some very important things which still stand today. So
that meeting was the beginning of the U.S. dollar empire. They established an agreement that they
would form things like the United Nations, the IMF, the World Bank, the World Trade Organization,
eventually the World Health Organization. And they agreed to use the U.S. dollar as the reserve
currency. In other words, the currency that people would transact their international
settlement, trade settlements in. This was pretty much railroaded through by the Americans. They
had it all ready by July 1944, which is suspicious in itself. And so there were two major allies that
were very, very suspicious about what the hell was going on. The war was in full flight. They were
nowhere near the end of the war. And so two major allies said, what the hell is going on?
And I've written on the slide there, who were they? Who were the two major allies? Well,
I'll answer the question. They were United Kingdom and the USSR.
Both of these allies, the two major allies, were very suspicious. The leader of the UK
team was John Maynard Keynes. Maynard Keynes proposed a very different solution. He wanted
an international currency to be agreed, a basket of currencies. But he had no power to drive that
through. Somehow or other, he had a heart attack on the sixth day of the meeting. And that's also
regarded with some suspicion. And he was never the same man again after that. He was a brilliant,
brilliant person and was able to control lots of things, but not the outcome of the Bretton Woods
meeting. The Russians from the USSR were immediately suspicious. They said so. They never
ratified the agreement back in Moscow. So basically, from that moment on, Russia had
clearly stated its case in regard to this dominance of currency of the US dollar. They knew
what trick was being pulled. So I would call it a trick. Some people may not, but
that's what happened. So the US dollar dominance began and it manages to persist because of the
volume of dollars that are outside the control of the US government. And we call those dollars
Euro dollars. It doesn't matter whether they're in Japan or Australia or Papua New Guinea.
Any US dollar outside of the US is called a Euro dollar. Now, central banks hold many different
currencies in different volumes. But the dominant currency they hold is the US dollar. In fact,
it's 60% of central bank foreign exchange holdings. The next most heavily held currency is the Euro,
which is 20% of central bank foreign exchange holdings. In other words, holdings that are
available to settle global trade. And the important thing to understand here is that
other major currencies such as Australian dollar, the Canadian dollar, the Chinese Yuan,
the French franc, the Swiss franc, all make up about 2% of the remainder. So they're 2%.
US dollar 60%. Euro 20%. Now, some people say the Euro is purely a US dollar proxy established by
the Americans. And I tend to agree with that. And that means they have 80% of central bank
foreign exchange holdings that are there and available to be used to settle global trade.
So it's a very, very dominant situation. Something happened in the 1960s, which really
cemented this. And that was the development of the Euro dollar loan market. This is where the
tax haven banks create loans to nominated US dollars. And they loan that money mainly,
principally, to large corporations. So this then grows the Euro dollar volume outside of America
very much. And almost some people say it was an accident, but nonetheless, it happened. And
the dominance of US dollar is held by two things. One is the strength of the US military,
which enforces it. And also the sheer volume of US dollars that are outside the control of the United
States. I think the next heading is national currency. So let's talk about what a national
currency means. So a nation is bound by its general acceptance of a national currency.
I would go so far as to say that a nation is its currency. Without its currency, it's really not
a nation. So it is a tribal or group contract enforced by law with the perpetual contract. So
it really binds people into a currency. Yes, we have a flag. Yes, we have a parliament. Yes,
we have a judicial system. But really, deep down in the contractual agreement, it's the agreement
to generally accept the national currency, which fuses and cements the society. The currency is
issued by either the Treasury Department, the Central Bank or both. I've said before, Germany's
had six national currencies in the last 100 years because of all of the events that have occurred in
Germany. And yet they've still got a robust economy. It's quite an amazing achievement.
Now, some central banks are privately owned. Others are 100% government owned. Most of them
are 100% government owned. And some have got a mix of ownership. I've written another editorial
on boom finance and economics on this subject. It's actually on the same link as the one I just
gave previously. And that is all about who owns the central banks and the fact that you can actually
buy shares in some central banks. Those central banks are the Bank of Japan and the Bank of Italy
and the Swiss National Bank is three. And they're all big, big central banks. You can buy shares on
them. They're publicly traded on the stock market, but they're not a very good investment.
The possible exception of the Swiss shares in their central bank. But it's a shock to
most people to realize that you can actually buy shares in these banks. The banks that are 100%
privately owned include the United States Federal Reserve. They don't call themselves a bank. They
call themselves the Federal Reserve. And it's privately owned. A lot of people don't realize
that. So there's a mix of ownership. The interesting central bank that's been formed in the last 20
years is the Bank of Russia. And it has a very interesting constitution. If you're at all
interested, you might like to read that. The central difference between capitalism and communism
has to be understood. In the USSR, there were no commercial banks. There were no bank ones.
There was one bank that was the central bank of the USSR. They created the money. They spent the
money into the economy. That is what communism at the end of the day is really all about. It's
total and utter control of the money supply by a central bank. In our world, the central bank does
not really control the volume of money. It tries to control the volume through inter-freight
settings. That's basically the difference between capitalism and communism. We've got a lot to cover,
so we won't dwell too much on banking. We've gone through a lot there on banking. The next thing
I thought we should mention is the subject of cryptocurrencies, because everybody's confused
about it. Cryptocurrencies are in fact digital tokens, but they're not money. They can't be
money. If you look back at all the tests for money I just gave earlier, you'll soon learn that they
can't be money. What is blockchain technology? It was called the chain of blocks. It was cryptographic
technology invented in 1986-87. Then there was a paper released by the NSA, the National Security
Agency in America in 1996. In 1996, they released this paper called How to Make a Mint,
it's cryptography of anonymous electronic cash. Nothing happened. I read that paper within 48
hours of it being published. A friend sent it to me. Nothing happened. Then 12 years later,
a mysterious Japanese person called Nakamoto Satoshi, or really they called him Satoshi
Nakamoto. He arrived and he released the Bitcoin blockchain in 2008. I'll just tell you the meaning
of if we reverse the name Satoshi Nakamoto, it means Nakamoto Satoshi, of course. Now that in
Chinese characters means central intelligence. The How to Make a Mint paper in 1996 was released by
four employees of the NSA in America, the National Security Agency. Then the Bitcoin blockchain was
released and off went the world of crypto. It reached its zenith only one year ago. It reached a
market capitalization of $3 trillion. I wrote an editorial at that time and said,
this will collapse below one trillion. I wrote that editorial about a year ago.
And it has now collapsed way below one trillion. Now it's about,
at the moment, about $820 billion of total market capitalization value of the crypto world.
There's now 9,000 of these crypto tokens available to be traded on various exchanges around the world.
And you can go to coinmarket.com and have a look at them all if you're interested.
I'll just say a few more. I think I've gone the wrong way. Where are we?
Anyone see? You're right. So I'll just. Okay, all right. I hit the wrong button. So the crypto
world, is this money? No, I'd call these digital commodities. They don't meet the tests of being
generally accepted in particular. So generally accepted is the digital currency. And the digital
general acceptance is the problem here. There's a lot of other things. They really don't have
the legal backing that currencies are supposed to have under their normal formation.
So there really can't be currencies. They're just digital tokens. They're not much different to
what a chip you might get at a casino. Okay, so that's the crypto world. Now we're going to
get on to the world of CBDC. Someone might have heard of this. Central Bank Digital Currencies.
CBDCs are the current threat that people are very worried about. But there's a few problems.
Most central banks cannot issue a currency. It's against the law. They can't do it. They can only
buy and sell securities or assets. They can create the assets and buy and sell them, but they can't
issue a currency. Isn't that interesting? So most central banks cannot issue a currency by themselves.
But one interesting exception to that, by the way, is the Bank of Russia. But that's just an
interesting side issue. So what is the CBDC? It's supposedly a central bank digital currency.
But we've already got a dominant digital currency. It's the US dollar. We've already got digital
currencies. In fact, all of our currencies are now digital. And guess what? They've been digital
since the mid 1960s. They're on the electronic bank ledgers. So we've had digital currencies for
going on 70 years. Okay. And our current money supply is now 98% credit on those bank ledgers.
Therefore, 98% of our money is digital already. And only 2% is cash. So 98% of our transactions
are already being tracked on digital ledgers. And they've been tracked for many decades. So the idea
that you, oh, shock horror, they might be able to track where I'm spending my money. Well, I'm sorry
to tell you folks, they're already tracking 98% of your transactions and have been doing for a long
time. Then they say, Oh, they'll be able to control where we spend money. Well, that's unlikely as
well. Because credit ratings have existed for decades. Credit availability is already restricted.
There's always, there's already restrictions on credit money. It's not as if you can just,
everybody can just get access to credit money from a bank. Okay, so cash is different. Cash is 2%
of our money supply at the moment. And it's very, very different. I won't, I can go into
the central bank digital currency later in the question and answer session. Someone will have a
question. Let's go on to the importance of cash. So cash is sovereign money. It's the money of the
people. The sovereign, or the, in which case it'll be most cases, the government these days,
sovereign will create more money in response to demand. And guess what? Such demand cannot be
refused. If you increase your demand for cash, it has to be provided by the sovereign.
There's some very bad consequences if the sovereign doesn't. So you can acquire cash at the bank,
the ATMs, and you can get it at merchants. They'll often offer you cash at a merchant if you ask them.
So we've got to boost cash back to 50% of the money supply. That's my main
call to immediate action for you today. We've got to use cash as much as possible. It's our money.
It's not bankers money. It doesn't generate an interest. There's no interest. It's interest free.
It's the people's money. And we can demand it by using it. In other words, the more we use it,
the more the demand goes up, the more the central bank or the government or the treasury
will print the cash and send it out. You can ask merchants to give discounts for cash. This is a
really powerful thing. If our merchants start to tweak on to the idea that they can give a 5%
discount, if you settle with cash, that'll grow like Wi-Fi. The merchants will realize everybody
is starting to offer a discount. You've got to start asking the merchants to give you a discount.
This could be very powerful community action. And you've also got to use community owned banks
instead of shareholder owned banks. That's the third key item.
So what's a community owned banks? Well, it doesn't give pay dividends.
It's owned mainly by, it's like a club. It's a cooperative. All of the community owned banks
in Australia have erupted from credit unions or building societies in the past. They've now
been granted banking license so they can create credit. They don't pay dividends.
In Germany, 75% of all banking is done by community owned banks. There's no shareholders
in those banks. There's no dividends paid. So they can retain the capital, the profits as capital.
This gives them a tremendous stability. We've got quite a lot of these banks in Australia.
You can go and check various lists. I've given you some links to lists of banks,
but the ones that are pretty well known, Australian Military Bank,
Auswild, Heritage Bank, Police Bank, Q Bank, QDOS Bank, RACQ Bank, there's quite a few more.
I'd encourage you to use community owned bank. And lastly, we're going to talk about the subject
of wealth. So what's wealth? Well, financial wealth is money trapped in assets. Okay, financial
wealth is not currency because it's trapped. It only becomes currency when the asset changes hands.
It changes form then from wealth into currency, and the currency is transferred back to wealth
in a lot of circumstances. But that's not really wealth. Wealth is encompassed by our health,
our independence, the rule of law, our freedom, an independent justice system,
a democratic political system, strong community, strong family, strong friendships.
That's what wealth really is. And you've got to always be thinking, we've got to understand that
we think democracy will take care of all of this. The fact is, democracy can easily transform into
a tyranny of the 51%. So don't just think that your democracy will guarantee your wealth, it won't.
There is an alternative to voting systems. I'll just mention it. It's called sortition.
That's election by lottery. We won't go on about that. So government is our collective responsibility.
We've got a choice we've got to make today. It's all between globalism or nationalism.
This is our big choice. Why? Because the globalists are seeking immortality for themselves,
slavery for us. This is the choice we have to make today. What's their motivation? Well,
they're guided by technocracy, transhumanism, and eugenics. And they're driven by the philosophy
of utopianism. Utopianism came from Thomas More, who wrote a book called Utopia 500 years ago.
Then Charles Fourier, a crazy Frenchman, wrote a lot of books and dreamt up a lot of ideas.
And his ideas went forward as what's called Fourierism, and infected the world of eugenics.
It developed into Marxism through Karl Marx. It created Mikveh Israel, the first settlement
in Palestine called that was really the birth of Israel. It was responsible for national socialism,
or the Nazi Party. It was responsible for communism, responsible for Zionism, or feminism.
In fact, Charles Fourier invented the word feminist. And he also had dreams of climate
change and wrote about climate change. And that was in the early 19th century.
So you've got a choice, folks, freedom or slavery, globalism or nationalism. That's their choice
today. That's just the end of the formal presentation. There's a lot of stuff there.
I hope I haven't gone too quickly. A lot of the terms are foreign to a lot of people.
But I think we should have some questions and we can develop a discussion. Charles?
Beautiful. Beautiful, Gerry. Well done. Stop your sharing.
Good. So everybody give Gerry a round of applause. Good job.
All right, questions. Elaine Lucas, you can go first because you sent one through to me. I'm glad
to see that you are here. And then please put your hands up for questions. One of the issues,
Gerry, I'd like you to raise is the one that I raised earlier. Elaine Lucas, if she doesn't
want to ask you, she asked the question, where does Australia borrow the trillion
dollars plus of debt that is said to be owed? Where does that come from?
That's a great question. I didn't get into that because I could speak for hours on this subject,
so I had to sort of give you half an hour there. Australia doesn't borrow from a bank.
It issues bonds. And the process of issuing a bond is very, very different to borrowing money
or borrowing money from a bank. They're extremely different things. So they issue a bond. It's a
piece of paper with a contract on it. And that contract, remember I said, money is a contract.
They issue a paper, it's called a bond. They basically issue this to any willing investors.
The investor invests in the piece of paper. They say, okay, I'll take that paper off you
because I trust you're going to be there in 10 years' time. You're the government of Australia.
And the government of Australia in that contract says, we'll pay you X percentage on the initial
amount. And then at the 10 year, at the end of the term, the bond will, what we call, mature
and the money will be paid back to the investor. And the investor will get income all the way
through. So that's interest bearing money. But there is no money created when a bond is issued.
None. The money has to come from investors' pockets with one exception. And that's when
you do, when a central bank does what we call QE or quantitative easing. And that's a rare event.
It doesn't happen very often where the central bank buys some government bonds, if not all of
the government bonds. So that's an exception. So QE, which we've sort of heard of quantitative easing,
is the exception to the rule. But usually, when a bond is issued, there's no new money invented,
not created. So it's very, very different to a bank line. Say your government went to a bank
and borrowed money from the bank in a bank line, then we have fresh new money. In fact, I could go
into the reason that I think our government could do that instead of issuing bonds, but that's very
complicated. But so we're not loaning money. We're not borrowing money as a government or a bank.
There's a difference between a government borrower and an individual borrower. Government is an
immortal being essentially, and can enter into very long contracts of trust, because people trust
that it'll be there in 20 years time or 30 years time. If I borrow money off you, Charles, I'm pretty
sure you won't be here in 30 years time or 40 years time. So you're not regarded as an immortal
borrower. So this immortality is interesting. The contracts are written in very specific ways
so that they both have a capital value and an interest component, and that makes them different
for an investor. So now there's another important point. I'll just very quickly make this very great
you'll hear often people say, oh, the debt to GDP ratio is, let's say, in Australia, it's about 40%,
but in other countries, it's up to 100%. In Greece, 150 or 200% or 250%. Yeah, yeah, yeah.
People say, shock, horror, we'll never pay this back. Well, there are two issues here. You don't
have to pay it back because when as each bond matures, it could be rolled over to another set
of investors or the current set of investors will just say, just roll it over. I'll take another 10
years. So at maturity, the bond is just rolled over more often than not, either to the same investors
or to another new group of investors. You can even pay all your interest on the bond by doing.
I won't go into that, but yes, you can pay all the interest. So let's dispense with the mechanics
and just talk about the debt to GDP ratio. People get scared about this. They ask, how many trillions
of dollars? Oh my gosh, how are we going to do this? But it's a incorrect ratio. The debt
is usually got around 20 years of term, maturity, and they measure it to one year of GDP.
This is totally ridiculous. If they changed it to 20 years of GDP and compared 20 years of debt to
20 years of GDP, then everything changes. Let's give you an example. Say we look at the US
current government debt, which is about 30 trillion. We say, their economy is only 20 trillion.
It's 150% of GDP. It's a terrible disaster. That's not true. If you look up there, 20 years of GDP,
it's 400 trillion. Suddenly the ratio goes from 30 trillion compared to 20 to 30 trillion compared
to 400 trillion. All that economic activity is going to take place while all that debt
is being serviced. That's really important. Debt to GDP ratios mean nothing. They're badly constructed.
There's also another thing called the velocity of money. We'll just stop there for the moment,
Jerry, because I want this to be reasonably tight one hour or so rather than... Okay, well,
that's enough on that. I mean, I can go. The next question is, what does someone do?
They're sitting on a piece of land. We're living in pretty interesting times. Today, that property
is worth $2 million unencumbered. You're not giving advice here. What are the factors that
someone like that should take into account? Well, should I sit on this land? If there's a
depopulation agenda, it might only be worth a million dollars. What are some of the factors
that people should take into account on that thinking? Well, I think that if you go back over
the presentation I've just made, you'll see the centrality of housing in our money supply system.
It's the biggest credit money created in a bank loan is there money created as bank loans or
with mortgages attached for houses. So it's got a centrality to our financial system,
is the house. And it's important because we have to live somewhere into the day. So
that centrality of the house in the mortgage loan origination process should give you some idea
of its importance as it looked at the whole financial system. So where else can you invest?
Well, basically you can keep money in cash. You can invest in commodities.
You can invest in property, real assets, or you can invest in stocks. So if you sell a house and
end up with a whole pile of cash, you've got to decide what your asset allocation is going to be
from that day on. And you've just stepped away from the biggest, most dominant part of your
financial system. You've stepped out of it. So I don't generally, I mean, I think that's a very
important decision to be made. And then you've got to be really careful about your asset allocation
against all the other investment possibilities. But I tell people, look, asset allocation is very
important. You've got to work out how much cash you're going to hold, how much property you're
going to hold, what your home is in that mix, how many stocks you may own, how many bonds you may
own, or you may like to own some commodities. There's a whole range of other assets you can
buy, but that's called asset allocation. And that's very, very important thing. And if you want to be
safe, you can just split it up into the same all across. The problem we've got is our houses
are the biggest asset we own, and we've got to live something. But it's got its centrality
buried in our creation of money. So that's an important thing to consider.
That's all I'd want to say on that. I think you've got to sort of make up your mind about
that centrality. And okay, so the next one, Gerry, is with cash and money. Your advice was we should
all be pushing to use money. And you've heard me and those on phone have heard me say I use cash as
often as possible. I tell young people, I tell young people, I give them cash, always use cash,
and I smile at them, I look them in the eye. I'm surprised how many young people realize this. So
what's the threat? What are the dangers, someone asks, of getting rid of legal tender and digitizing,
you know, the whole economy, Gerry? And you said let's go to 50% cash. Well, what's the consequences,
you know, if we get rid of cash? Great question, Charles, we actually have to get rid of physical
cash, because we need electronic cash. And we desperately need it, because our working
age populations in the Western world are all in decline. Therefore, our borrowing numbers are in
decline. The number of borrowers coming forward to create fresh new money with bank loans is in
decline. And this is the case for every advanced economy in the world, including China, is only one
continent that is not in this situation, and that's Africa. So we've all got a problem.
What is what? We're running out of borrowers. And the reason we're running out of borrowers
because of the demographics. And that's what created not completely, but it was the beginning
of the financial crash of 2008. We essentially ran out of borrowers. There are a lot of reasons
why, but just concentrate on the working age population decline. That's really, really important.
Now, we need to get the cash component back up, because cash is a form of money that generates a
lot of stability in an economy. If you think back to the 90s and 50s and 60s, they were very stable
economies. Why? Because there was so much cash in circulation. And in comparison to credit, it was
dominant. So if we can get cash back up, we'll end up with a much more stable economy. It's
really, really important. Please note that if we get the cash percentage up out of the whole
money supply, the economy becomes more stable. Less inflation cycles, it's much more stable.
So very important point. Now, if we got demand up enough, we could just do that with physical
cash, but it would be just about impossible. Everyone's used to just waving the plastic.
So I think there's a very important element here. We need to create electronic cash.
And I think the central banks are trying to stop it, because banking sector makes zero profit out
of cash. Nothing. They've got 98% of the money creation. They don't want to see it go down.
So I think the whole scare campaign about central bank digital currencies is being created by the
central banks themselves. And there are two very important speeches that you've got to watch
to understand that one was made by Christine Lagarde in 2018 in Singapore. The other one is
made by Augustine Carstens, the head of the Bank of International Settlements, where they basically
just said, we're going to bring in social credit, we're going to control this, we're going to,
they actually came out and it's clear as a bell, they wanted to scare the pants off everybody
about electronic cash, but they called it CBDC, central bank digital currencies.
They've actually been so successful at this in the last four years. We've got people almost
marching up and down the street demanding that electronic cash not be created. We should be
marching up and down the street demanding the creation of electronic cash. It's really
bizarre what has happened, but they've been very successful. That's my gut feeling about the whole
CBD fiasco. It's another fear and control process launched by the central banks themselves. And if
you doubt me, go and watch Christine Lagarde's speech in 2018 in Singapore. It is the most bizarre
speech a central bank has ever made. Okay, beautiful. Thank you, Gerry. We've got John O'Connor
and we'll finish in a couple of minutes so that people can plan their lives because we said this
was going for one hour. Gerry's got work to do to save the world from scams and a wife who wants him.
John? Gerry, just one question. I'm just so behind in the financial field, but when you say digital
cash, does that mean that that digital cash would be tied to a commodity base like gold or silver?
Is that what you're saying? No, no, no. That's called sound money. If you read my editorial on
the failure of sound money in the 19th century in the United States, you then realize that that's the
absolute disaster. Backing currencies with things like gold is a disaster. The British abandoned the
gold standard in 1931 and they were the dominant currency then. They were the reserve currency.
The pound was the settlement currency, the sterling. The Americans took over that reserve
currency status and didn't abandon the gold backing until 1971. It took them 40 years to work out the
disaster it was causing because if you tie it to something like gold, your issuance of currency,
then you've got to find a very clever committee to continually value the price of the currency
against gold. In other words, to value gold. What's gold's value? Well, very questionable.
The other thing it generates is nations, when there was gold as a central component of their money
and backing, they stole gold. What do you think Spain did in South America? They went there and
stole the gold. They murdered and mayhem and stole as much gold as they could. Gold is a really
poor thing to do with backing currency. You can't expand your economy. You've got to find
this very clever committee of economists. I haven't been able to find one yet, the Atlanta committee
often, to set the price of gold. It's just clunky. It doesn't work. All the people who propose it
just tell the same lie over and over again. They say the US dollar will collapse.
Gold will skyrocket in value and price. Well, look, there are people who have been writing that
article for 30 years. They write the same article over and over and over again. I've watched the
articles. They never vary and they're never right. They're never right. If you get on the internet
today, you will be bombarded with those articles about the glories of the gold backing of currencies.
It's ridiculous. The fiat currency system we've got is possibly the most marvelous invention of
mankind. It's allowed us to create this huge complexity in our economy. We've got jumbo jets.
We've got MRI scanners. We've all got beautiful cars that are air conditioned to drive around with.
Our economies are living in nice homes. The complexity is wonderful and that complexity
sprung from the creation of credit that's not backed by gold. I think that's just a
bit of a con, the whole gold thing. I don't think it's worth it.
All right. Last question. What's the difference between a community bank and a credit union?
Good question. A lot of our credit unions have become community banks. They've been given
banking licenses. When they were just credit unions or billing societies, they could only
loan their savings. In other words, the savings of their depositors. As soon as you change into a
bank, you don't loan the money that you've been given as a deposit. You actually create fresh new
money in a loan. The banking license is that. It's the ability to create credit money over and above
any deposit money that may be there. Credit unions are good and billing societies are good,
but they are not good in terms of growing the complexity and size of your economy
because they're limited. It's the same thing as limiting your money supply to gold. It's not
much different. You're limited. That's why our credit unions have become transformed into banks
in the last 10, 12 years or so. Beautiful. Sorry, Charles.
Yep. The spread or the allocation of assets, I enjoy reading James Rickards. He, through history,
he said if you had $10 million, this is the allocation that he would recommend. He followed
the wealth of European families over the last 900 years through socialism and terrorism and blah,
blah, blah. One idea that stuck in my mind, Gerry, was the value of fine art, museum quality,
because you can cut the picture out of your wall, put it into a tube, and walk over the mountains
like sound of music carrying millions of dollars of artwork. Anyway, here it is, everybody.
Physical gold and silver, 10%. Cash, 30%. Real estate, 20%. Fine art, he said fine art fund,
5%. Angel and early venture capital, 10%. Hedge funds, 5%. Bonds that Gerry talked about, 10%.
And stocks, 10%. There you are. That's an example of an allocation by a guy who's,
you know, a lot of people watch him around the world. Gerry, last words from you?
I do want to talk about Jim Rickards. He's the man I'm referring to. For 30 years,
he's written the same article over and over and over.
Hey, how brilliant is that? I wish I had a genius.
His article is The US Dollar Will Collapse and Gold Will Skyrocket. I first read his article
saying that in the early 1990s. It's 30 years ago. He has never changed. He sells books. He
sells conferences. He sells newsletters. The whole thing is just a great fiasco of mistruths.
In fact, the whole Austrian School of Economics, which he's part of, is sound money people.
Quite frankly, it's all a misinformation program.
So isn't that wonderful, everybody? This is like moderating a meeting of doctors,
having a debate about various matters. So everybody, please note. But I think the fact
that you are here, those who are watching a recording of this, Gerry, you've given us a
snippet. You've given us resources to learn from. Your advice is that we must keep learning. Stop,
you know, stop being surprised about it because what we're dealing with here is complex issues,
and you can't hope to master it without learning.
No, that's right. I'd encourage everybody to get the slides I put up today just to get started.
You've got to start reading. I mean, it's taken me to get to my level of knowledge in this area.
It's a very, very heavy commitment of learning over at least 20 years. The central bankers
read my stuff. The chief economic advisors read it. It's quite amazing. And I'll just tell you a
little story there. One of my very good friends in the world of finance is a very famous fund
manager, possibly one of the most famous of all. Lovely man. I know him very well. He's always
managed 30, 50 billion. But he's the same age as me. So we're very similar in our whole life,
what's happening at large and all sorts of things. But we meet on a regular basis. Usually we have
lunch. I won't say where, but somewhere in the world. And every time we talk all about what's
happening, you know, what do you think here? What does this lunch goes on for three hours,
backwards and forwards, backwards and forwards. Okay. And last time I was with him, I said,
I want to ask you, why do they read boom? Because he knows a lot of central bankers.
Oh, he said, they read boom because they can't read it anywhere else.
In other words, I'm giving the world of finance a viewpoint, which they really can't get anywhere
else. And the reason they can't is because they lose their jobs if they started promulgating a
lot of the stuff I talk about. The world of economics and finance is a religion.
They're archbishops in that religion. And so they sneak every Sunday morning,
they sneak a look at boom and read. So that's what he said to me. And believe me, he does know
what he's talking about this man. And you're getting good feedback from people who give you
perspective. So next week you add to that. So it's very good. Jerry, we're going to go.
One very last thing. The other question he always asked me at the end of every lunch,
he says, Jerry, come on, how many euro dollars exist? And you know why he always asks this last
question. And do you know why? Why whose? Nobody knows. The tax haven banks won't show you their
ledges. So we have to try and work it out through, let's say, surreptitious means as to what the value
is. So we always finish our lunch with a discussion of what do you think? And I give my number,
he gives his number. I've been here for years and he keeps coming up all the time. But I think I
know the answer to that question, but I'm not prepared to say it on a public meeting.
Very good. Well, Jerry, we might have to cut off that bit about Jim Rickards. It might be a little
bit. No, that's that's that's that we want to make you famous through controversy. That's the way.
Oh, I don't I don't seek fame, no fame at all.
We'll sing you a song. Fame. I'm going to live forever. OK, thank you all for being a good
audience. Everybody. Thank you, Jerry. We have this recording will be available for you all.
We share it with the phone link and then you can share it with others. Please. It's designed to be
shared with others so that the knowledge around money increases. So thank you, Jerry. Thank you
for being here, everybody. And we'll see you on Friday at the next meeting and we'll stop the
recording.